Mumbai, March 17 Describing the reconstruction scheme for Yes Bank as credible and sustainable, Reserve Bank of India (RBI) Governor Shaktikanta Das on Monday sought to assure the private bank’s depositors that their hard-earned money is safe.

He also said that the central bank will infuse additional liquidity into private lender, if required, and urged depositors that there was no need to carry out panic withdrawals after the moratorium on the bank ends on Wednesday (March 18).

“It is a very credible and sustainable restructuring plan,” Das said while addressing the media here on the Yes Bank issue and the coronavirus crisis.

Terming the restructuring of the bank a “historic development”, he said that it is the first time a weak and failing bank has not been merged with another stronger lender and rather the central bank has gone ahead with reconstructing the bank.”It is also an instance of public private partnership (PPP) for revival of a private sector bank,” he said.

Against the backdrop of the Maharashtra government deciding to desist from having accounts in private sector banks, Das said that RBI has written to all state governments saying that the Indian banking sector is sound and safe, including the private banking sector.

“There is no reason for the state authorities to keep away from private banks who are important components of the banking sector,” he said.

The government on Saturday notified the scheme of reconstruction for cash-strapped Yes Bank Ltd paving the way for the lender to resume full operations. The bank on Monday said that it will resume its full-fledged operations at 6 p.m. on Wednesday (March 18).

Investment by private banks has so far reached Rs 3,950 crore. Among the private players, ICICI Bank and Housing Development Finance Corporation committed Rs 1,000 crore each. Axis Bank and Kotak Mahindra Bank committed to invest Rs 600 crore and Rs 500 crore respectively. Both Federal Bank and Bandhan Bank have been allotted shares for Rs 300 crore each as per their commitment and IDFC First Bank has been issued equity shares in the crisis-ridden bank for a consideration of Rs 250 crore.

Further, SBI which would hold 49 per cent stake in the cash-strapped lender has been allotted 605 crore shares for Rs 6,050 crore. SBI, the largest public sector bank in the country, has in fact committed Rs 7,250 crore. On Thursday, it said that its Executive Committee of the Central Board (ECCB) has approved the purchase of 725 crore shares in Yes Bank at Rs 10 per share.

The private sector bank had been put under a moratorium by the Reserve Bank of India since March 5 which has restricted deposit withdrawals up to Rs 50,000 per month. Under the terms of the notified scheme, this moratorium will now be lifted at 6 p.m. on March 18.

The Central government has appointed former SBI official Prashant Kumar as the new Chief Executive Officer of the financially troubled Yes Bank. Kumar is currently the administrator of bank, and the former Chief Financial Officer and Deputy Managing Director of SBI will take over his new responsibilities once the moratorium on the stressed lender is lifted on Wednesday.